Humana Inc.
(
HUM
) recently announced an exclusive agreement with Veterans of
Foreign Wars (VFW). Under this deal, the company will be the
exclusive provider of Medicare Advantage (MA) plans to the
organization's members throughout the U.S. VFW is the country's
biggest and oldest war veteran organization with over 700,000
members.
This opens up a huge base of prospective clientele for Humana.
The company can now offer its MA health plans to VFW members and
their spouses who are qualified for Medicare. In addition, Humana
will be able to provide assistance to those who will be eligible
for the program with time.
Additionally, Humana will conduct Medicare seminars for VFW
members in the approaching Medicare Annual Election Period and hold
informative seminars all through the year to keep them aware of the
available Medicare alternatives. The company will also supply
information about Medicare Advantage to these members through
web-based tools, in-home appointments, call centers, and
self-enrollment.
The agreement should boost Humana's Medicare Advantage
membership and consequently, premiums and services revenues. This
will be beneficial for the company since it is heavily reliant on
Medicare Advantage revenues, which accounted for 60.5% of its
health-insurance premium revenues in 2011. It will also help the
company in its initiative to support the well-being of veterans by
providing the necessary tools, information and support.
Humana has been involved in providing health benefit support and
services to active and retired military members and their families
through its subsidiary Humana Military Healthcare Services, Inc.
The latter has a wholly-owned subsidiary - Humana Veterans -
dedicated to providing healthcare services to war veterans.
Humana Inc. is one of the largest health care plan providers in
the U.S. and competes with other industry heavyweights like
WellPoint Inc.
(
WLP
) and
Aetna Inc.
(
AET
). The company carries a Zacks #4 Rank, which translates into a
short-term Sell rating. We have a long-term 'Underperform'
recommendation on the stock.
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